Midterm Freight Forwarding
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1. A sight bill of exchange is risker than a term bill of exchange: True
2. Docs – what international convention regulates the traffic of poaching a
that are at risk of going extinct
a) ATA Carnet
b) CITES
c) UNCISG
d) URC522
3. How many digits are used in the HS Tariff system in Canada 10
4. Whsg – if you have 155 pallets, each 48in x 42in x 42in. What is the
volume in this closest? 215
5. Which document would be most important to determine delivery in a CIF
transaction?
a) Certificate of inspection
b) The packing list
c) Bill of lading
d) Comm. Invoice
e) Insurance certificate covering all risks and war
6. Which storage method would best utilize the space in a warehouse?
a) Rank by popularity
b) Cube per order index
c) Random location
d) Rank by size – smallest closest to the loading area
7. There are two measures of the maximum warehouse’s liability in goods;
one is $500 per unit or the other is 100 times the monthly… False
8. A House Bill of lading not acceptable proof of delivery under a letter of
credit because
a) A HBL is not issued by the shipper
b) A HBL is not a contract of carriage
Note: “I think this is right”
c) A HBL is signed only by the buyer
d) A HBL is not a carrier’s document, it is from the freight forwarder
9. Why do Canadian regulations only permit heat treatment for wood
packaging?
a) Canada signed the Montreal Protocol on Substances that cause
climate change
b) Because methyl bromide cancels the effects of heat treatment and is
ineffective
c) Because Canada has a found methyl bromide to be toxic
d) Canada signed the Montreal Protocol on Substances that Deplete the
Ozone layer
10. What best defines the assembly a number of items into compost loading…
provided with skids and cleats for case of handling?
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a)
b)
c)
d)
Standardizing
Unitizing
Consolidation
Bundling
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11. This document is used by the USMCA parties to ascertain duty free status
in North America
a) Commercial Invoice
b) Certificate of inspection
c) Phytosanitary certificate
d) Certificate of origin
12. Which of the following is not a good way to use HS Tariff for goods coming
to …
a) Transship through a lesser developed country
b) Complete final steps in the production in the country of origin
c) Bring them in from LDCT or CCCT countries
d) Change the code to one that fits the product but has lower tariff
13. The symbol means
Th
a) Protect from heat
b) Protect from machinery
c) Ship only in summer
d) Ship in Caribbean only
14. Single wall, double wall as used in construction of
a) Cardboard boxes Note: “I think this is right”
b) Crates
c) Wire bound boxes
d) Nail wood boxes
15. Pallets come in various sizes. Match the criteria for each:
a) 3. container 1. Space utilization
b) 1. Package
2. Limit 1000kg
c) 2. Weight
3. Same uniform
16. When stuffing a container, what is the primary packaging consideration?
a) Volume versus actual weight
b) Container type capacity
c) Separating consolidated cargo
d) Pack for the toughest leg of the journey
17. Packaging serves which of the following purposes:
a) Marketing and safety
b) Safety and protection
c) Distribution and theft resistance
d) Marketing and distribution
18. For ab LC, an ____________ must be agreed upon by at least ______________
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and _____________
a) Amendment; applicant, beneficiary
b) Acceptance; issuing, advising banks
c) Acceptance; corresponding, negotiating banks
d) Agreement; forwarder, a bank
19. Below there is one answer which is not an error on the LC
a) Freight collect or ppd not indicated
b) Documents missing
c) Beneficiary address incorrect
d) Description on commercial invoice differs from LC
20. What effect does unitization have on insurance claims and why?
a) An increase in claims as exposure to damage is increased
b) An increase I premiums as survey cannot be done
c) A decrease in claims as pilferage is reduced
d) None as unitization is expected to be done
21. Which is not an underlying factor in selecting a cardboard carton
a) Resistance to theft
b) Resistance to puncture
c) Resistance to moisture
d) Resistance to compression
22. Match the advantages and risk
a) Exporter gets paid if complies with LC advantage
b) LC is more expensive than a DC risk
c) Exporter may not get paid even if any conditions met risk
d) Importer controls shipping advantage
23. Which statement is true in respect to LC’s
a) Banks deal only with documents Note: “I think this is right”
b) Suppliers apply for LC’s
c) Banks deal with documents and the quality of the products
d) Banks participate with the buyer in negotiating LC’s
24. Which answer will render an LC revocable?
a) Latest date of shipment Aug 12,2014: actual date Aug 12,2014
b) Date of expiry of LC Aug 30,2014; actual date of presentation Aug
29,2014
c) Commercial invoices 4 copies; actual 5 copies presented
d) Applicant name ends in Limited: Actual LTD
25. In an LC and a DC the same parties are involved but have different titles.
Match these parties
a) 2. Buyer
1. Importer
b) 3. Seller
2. Drawee
c) 1. Applicant
3. Drawer
d) 4. Beneficiary
4. exporter
26. Put the following in the correct order
a) 8. Seller’s bank remits to seller
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b) 10. Buyer’s bank remits payment to seller’s bank
c) 1. Negotiate the deal
d) 7. Seller send documents to his bank
e) 3. Buyer’s bank forwards LC to seller’s bank
f) 6. Seller prepares and ships goods
g) 5. Seller agrees to LC
h) 2. Applicant applies for LC
i) 9. Seller’s bank send to buyer’s bank
j) 4. Seller’s bank send LC to seller
k) 11. Seller collects documents
27. Which is most untrue?
a) A LC requires acceptance of documents
b) A DC is a guarantee of payment
c) A letter of credit LC is a guarantee of payment
d) A DC involves a remitting and collecting bank
28. The buyer is stalling at paying the documentary collection (DC), it appears
that payment is not be forthcoming. The bank is responsible for:
a) Following the direction of the DC
b) The pay as they are the responsible for payment
c) Advise the buyer they must pay within 30 days
d) Remit payment and debit the buyers account
29. A collection letter is prepared. The document only indicates FATE:…
PROTEST: do not protest. This means the _____________ will ___________
a) Remitting bank, protest non acceptance
b) Collecting bank, protest non payment
c) Collecting bank, advise non payment
d) Remitting bank, advise non payment
30. Which document is normally required in a documentary collection?
a) A negotiable shippers bill of lading
b) A nonnegotiable multimodal bill of lading
c) A nonnegotiable bill of lading
d) A negotiable order bill of lading
31. A contract includes a documentary collection with the term D/P. the
exporter… ___________ and payment will be made _______________.
a) Collecting bank, in 10 days
b) Remitting bank, in 10 days
c) Remitting bank, immediately
d) Collecting bank, immediately
32. Which statement is correct?
a) Sight bill of lading is issued by a freight forwarder
b) Sight bill of exchange is issued by buyer
c) Term bill of lading is issued by remitting banks
d) Term bill of exchange is issued by seller
33. Which of the following pairing is correct?
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a) Buyer and drawer
b) Drawer and drawee
c) Seller and drawer
d) Importer and drawer
34. A seller retains control over the releasing of the cargo to the buyer using
…
a) Bill of lading
b) Commercial invoice
c) Bill of exchange
d) draft
35. A seller has faith in their buyer, but wants to have control over payment of
good delivery, which payment method would you recommend.
a) Bill of exchange
b) Letter of credit
c) Documentary collections
d) Bill of lading
36. Which one of the following payment methods involves a bank but not the
bank…
a) Bill of lading
b) Bill of exchange
c) Documentary collections
d) Letter of credits
37. As a freight forwarder, the importer requires proof of shipment prior to
payment example of _____________ and the other party who now assumes
risk is _______________
a) Documentary collection, the supplier
b) Open account, the exporters bank
c) Advance payment, the freight forwarder
d) Letter of credit, applicant banks
38. The importer’s country has a quota on your product. As an exporter would
you agree on open account?
a) No, as control of the quota is governed by international rules
b) Yes, if I have confidence that the goods will be imported prior to the
end of the …
c) No, as control of quota is by the government and the goods may not
be qualify
d) Yes as I will have, in writing, confirmation from the importer that the
goods will
39. A ________ is unadvisable to the seller only when a foreign currency can not
bought or traded in the buyer’s country.
a) Letter of credit
b) Open account
c) Documentary collection
d) Payment in advance
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40. When a product is shipped with prior payment, this is an example of:
a) Letter of credit
b) Open account
c) Documentary collection
d) Payment in advance
41. When product is shipped without prior payment or without a bank example
of
a) Letter of credit
b) Payment in advance
c) Open account
d) Documentary collection
42. Payment in advance provides the most risk to:
a) The freight forwarder
b) The seller
c) The bank
d) The buyer
43. An open account provides the most risk to:
a) The bank
b) The seller
c) The buyer
d) The freight forwarder
44. The export control list (ECL) has seven groups that prevent unauthorized
all but:
a) Group 1 – Dual use list for such goods that might be adapted for milit
b) Group 3 – Countries on Canada’s Area Control List (ACL)
c) Group 5 – Miscellaneous Goods and Technology (Includes goods of US)
d) Group 7 – Chemical and Biological Weapons
45. Export controls from Canada are generally not stringent and diff….
a) Livestock and Animals
b) Shipments to Cuba and Russia
c) Countries that are subject to a US embargo
d) Countries on the Area Control List
46. The commercial invoice is the document that
a) List all the contents of the shipment enabling a quick check by the
importer
b) Is the basis for entry and determination of duties and taxes
c) Certifies the goods came from the country of export for purpose of
duties
d) Is prepared by the exporter and certified by the consul in the
exporter’s country
47. The primary advantage of a bonded warehouse is
a) Avoidance of taxes when goods enter Canada
b) Deferral of taxes and duties until the product is needed
c) Safe storage. Expertise in handling, packaging and inventory control
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d) Control & flexibility are better and costs are lower than at a public
warehouse
48. The main risk for the exporter/drawer in a documentary collections
transaction that “ Documents Against Acceptance” riskier than
“Documents Against Payment” is
a) The drawer must wait until the maturity date for payment even
though the buyer taken possession of the goods
b) Political risk in countries that have restrictions on foreign exchange
c) Exchange rate risk that the exporter/drawer might face while awaiting
payment
d) There is no added risk fir the drawer, it is the drawee who has the
higher risk
49. Unitized Cargo assists shippers by helping the ensure all of the following
a) Losses and pilferage are reduced
b) Speed up loading and unloading
c) Keeping weight below the limits at any stage of the journey
d) The load is waterproofed by wrapping
50. The internationally recognized symbol for ”keep frozen” is a
a) Seal
b) Walrus
c) Polar bear
d) penguin
51. The international Wood Packaging Certification Program (IPPC)
a) methyl bromide
b) neither
c) either methyl bromide or heat
d) heat for a minimum of 56 deg. C for 30 minutes
52. The letter of credit is riskier for the seller than the buyer because:
a) Banks only examine documents
b) The seller can get paid immediately upon presentation of the clean…
c) None of the other answers are correct, the L/C is risker for the buyer
d) Fraud can be committed before delivery
53. This document provides a delivered cost estimate
a) Bill of lading
b) Commercial invoice
c) Certificate of origin
d) Pro Forma invoice
54. This document needs to accompany goods being exported that we valued
at … $2000
a) Letter of credit
b) B13
c) Consular invoice
d) Packing list
55. The document that is helpful in Customs identifying specific items for
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inspection is the
a) Commercial invoice
b) Packing list
c) Certificate of origin
d) Certificate of inspection Note: “I think this is right”
56. A Seller would most want
a) An irrevocable letter of credit
b) An unconfirmed but irrevocable L/C
c) A confirmed but revocable L/C
d) A confirmed, irrevocable L/C
57. Amendments to the L/C
a) Can never be made
b) Can only be made if all banks agree to the changes
c) Can only be made if the confirming bank adds its confirmation
d) Can only be made if the issuing bank agrees to it
58. Public warehouse rates are not based on
a) The size of the warehouse
b) Whether the goods are parallelized or not
c) The number of SKUs to be stored
d) Whether goods have to be un-crated
59. Which of these common causes of cargo losses would the carrier be for
a) Water damage
b) Accidents in handling and stowage Note: “I think this is right”
c) Lack of reasonable care
d) Theft and pilferage
60. I am using a warehouse to store 80,000 cases of goods
 25 cases fit on a pallet
 Pallets can be stored 4 high
How many pallet spaces do I need?
a) 400
b) 800
c) 1600
d) 1200
61. The international Chamber of Commerce rules governing the operation
and Collections and that aid international trade participants are called
a) UCP600
b) Incoterms 2010
c) IPCC
d) URC22
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